Lawrence J. Hogan, the Republican candidate for county executive of Prince George's County, yesterday endorsed the use of binding arbitration to settle public employe contracts and called for the elimination of the bicounty planning, water and sewer agencies in suburban Maryland.

Hogan, who has promised to reduce the county budget if elected, acknowledged that binding arbitration would limit the county executive's control of government salaries, which comprise more than half of each year's budget. He argued, however, that it was a tool public employe unions needed to survive.

"You have to give unions either the right to strike or binding arbitration if they are to have any power," Hogan said during an interview with Washington Post reporters and editors. "I'm adamantly against giving them the right to strike. If you take away binding arbitration, too, then you're robbing them of any real bargaining power."

Hogan said the two agencies that operate jointly in Prince George's and neighboring Montgomery County - the Washington Suburban Sanitary Commission and Maryland National Capital Park and Planning Commission - should be eliminated, with their operations and powers going back to agencies within each county.

"The way it is now, the WSSC is a wild elephant running out of control," said the 50-year-old former congressman. "And there is no longer any need for joint park and planning. The agencies should be divided with each country running its own ship."

Hogan's statements on binding arbitration and the bicounty agencies stand in marked contrast to the positions of his opponent in the Nov. 7 election, incumbent Democratic County Executive Winfield M. Kelly Jr.

Kelly said that binding arbitration, in which contracts would be settled by neutral arbitrators, is a "fool's way out." He added: "Binding arbitration allows the elected officials to step away from a tough decision. It in effect gives to nonelected officials the right to set the tax rate by settling contracts."

Although Kelly has had a number of run-ins with the two bi-county agencies, he has said during the campaign that he does not now favor restructuring either of them.

These two issues are among the few on which Hogan and Kelly have taken clearly opposing positions during the campaign. Their sparring, for the most part, has featured one arguing that he can do a better job than the other at lowering taxes and cutting the budget.

Hogan, during his interview, said that he could reduce the county's $440 million budget simply be eliminating waste ad duplication of services. He cited specifically the 18 separate printing facilities in the county government and several separate purchasing divisions, all of which he said could be centralized.

Yesterday, as on several other occasions. Hogan pointed to a $3.2 million police purchasing budget as the prime example of wasteful duplication. He said that all of that money went to the administration of the police department's purchasing division. Kelly has pointed to Hogan's frquent mention of the police purchasing duplication as evidence that Hogan "simply does not know how to read a budget." According to Kelly and his budget experts, the $3.2 million included the cost of gasoline and repairs for the police fleet of cars not simply the purchasing administration.

Hogan, who according to both his and Kelly's polls is holding a substantial lead in the campaign, appeared relaxed and confident at yesterday's interview, even offering sympathetic comments about his opponent's difficulties trying to handle what he called "the toughest political job in America."

The stocky former FBI agent said he expected the election to be closer than his polls indicate. "I think I'm going to win, but it's going to be close," said Hogan. "He (Kelly) has a fantastic amount of money, ad I have very little." Recent campaign reports showed Kelly with a campaign chest approaching $200,000, nearly four times the amount Hogan has raised.

Hogan, who served in Congress from 1968 to 1974, said he was "never cut out to be a legislator" and was frustrated as a junior member of a minority party. As county executive, he said he would finally be able to address the problems of Prince George's County, which he said included "high taxes, government insensivity and white flight."

The longtime school busing opponent said he predicted in 1973, when the federal courts ordered the county to integrate its school system through busing, that it would result in whites moving from the county. "That is clearly what has happene," Hogan said. "If the trend continues, the county will be predominantly or all black."

Hogan himself lives in a predominantly black, middle class subdivision near Seat Pleasant. He said he would attempt as county executive to promote the development of luxury, high-rise apartments in the county's decaying inner-Beltway neighborhoods, near the Metro subway stations, to integrate people of all income levels and races.