Prince George's and Montgomery countles, have worked out a compromise on transit funding that clears the way for Metro to receive $32 million in federal subway construction funds.

Prince George's County Executive Lawrence Hogan yesterday agreed to sign a regional Metro agreement on federal funds for several small construction projects and a subway car-testing track in Alexandria.

Hogan had withheld his signature from the agreement because of a squabble between Prince George's and Montgomery over the division of $16 million in state transit funds.

The funds have been divided equally between the counties in the past, but this year Prince George's sought more because its Metro operating deficit is larger than Montgomery's. Montgomery, however, argued that it should receive some credit for the county-operated Ride-On bus service.

Officials of the two counties completed an agreement Wednesday night under which Montgomery will get 44.5 percent of the funds and Prince George's 55.5 percent, or 2 percent less than Hogan had originally demanded.

Montgomery County Executive Charles Gilchrist persuaded the County Council to accept the agreement, according to spokesman Charles Maier. "He wasn't pleased with it," Maier said, "but he didn't want the system shut down because of a petty squabble between two jurisdictions."

Montgomery County will get $910,000 less in state transit funds than it planned under the agreement, while Prince George's will get $330,000 less than Hogan wanted.

In a state, Hogan said he "did not want to unfairly penalize other (Metro) jurisdictions who are not in any way involved in this issue."

The regional Metro agreement was not related to the Prince George's-Montgomery dispute, and needed Hogan's signature to meet a Sept. 30 federal deadline for obtaining the $32 million.

Ken Duncan, Prince George's chief administrative officer, said Hogan withheld his signature from the regional Metro agreement only because he felt he had "no other leverage" to win over Montgomery County on the division of the state funds.

In another development, Metro General Manager Richard S. Page yesterday announced the appointment of Thomas Black, executive director of the transportation commission serving Newport News and Hampton, Va., as director of Metro's bus operations.