If history is to be made, former Gov. Tony Knowles may be in the right place at the right time.

He will be the only second governor to hold a third term if he is elected again to the state’s highest office. Former Gov. Bill Egan was the first some 36 years ago.

But more significantly, Knowles sees the next governor making decisions that will affect Alaskans for generations to come.

And thus, his use of the words “We live in historic times.”

“Our challenge is that we don’t squander our surplus,” Knowles said. “It is a priceless gift to the next generations.”

Knowles ties state surplus monies, the proposed gas pipeline, health services and education together, as if he is always talking about one thing.

Then there are a number of ancillary issues like fisheries rationalization, state revenue sharing, ethics and the state jet, all also somehow related to the words “do not squander.”

“We are going to be making some of the most important decisions ever for our future,” he said.

“The reason I am running is to exercise Alaska sovereignty. We can have prosperity, but with that we can also have the finest education system in America,” Knowles said.

Knowles’ vision, he will tell you, is not just his vision but one he has been working on for some time in the rough and tumble arena of Alaska politics, and that makes it everyone’s vision.

Knowles came to Alaska during the early pipeline days some 35 years ago. He worked on the North Slope, at the time, 28 years old, a graduate of Yale University who hailed from Tulsa, Okla.

He became proprietor of Downtown Deli & Café on Anchorage’s 4th Avenue. From 1975 to 1979, he served as a member of the Anchorage Assembly and became mayor in 1982 serving to 1988, and in 1994 he became governor of Alaska, two terms until 2002.

Polls show Knowles to be a shoo-in Aug. 22, running against state Rep. Eric Croft in the Democratic primary. Who he will face Nov. 7 is uncertain, but an August Dave Dittman independent poll has Republican Sarah Palin leading the primary 40 percent, with John Binkley at 29 percent and incumbent Gov. Frank Murkowski 17 percent. A Rasmussen poll has Knowles in front of Palin by a slim margin of 6 percent.

The campaign war chest for Knowles also is gaining momentum. Latest figures according to the Alaska Public Offices Commission show Knowles has $368,429 in contributions with $100,000 of that coming in within the last three weeks. Palin has raised $353,279; Binkley has over $1 million and Murkowski about $260,000. Croft has $165,000.

Knowles admits he has been in hot water over decisions not always popular, “but that’s part of the job.”

In Kodiak, his failure after his promise during his first term as governor to appoint a representative from Kodiak on the state fisheries board displeased some. “You just can’t make everybody happy,” Knowles retorts.

Criticism over the appointment seemed to make Knowles unpopular in Kodiak, although during his bid for the U.S. Senate seat against Lisa Murkowski, Knowles out-polled her here.

Rationalization is an issue politicians seem to wrestle with without satisfying anyone, yet with lower prices and crew members out of work anti-rationalization forces continue to push for a more equitable distribution of the resource.

“We have already seen the effects of crab rationalization on the industry, and now there is the possibility of rationalization of other fisheries in the Gulf of Alaska,” Knowles said.

“The North Pacific Fishery Management Council has the obligation to review strategy and take the necessary steps,” Knowles said.

Knowles points out that an attempt to change the 90-10 quota split to 70-30 failed while he was in office and that state legislators voted down a rider to a bill to obtain a different quota split.

“Clearly, that had a negative effect on local fishermen,” he said.

“Our appointments are important, and we will be taking a look at those,” Knowles said.

At the same time, Knowles said the state cod fishery has produced better results and salmon prices are up.

He said while governor his administration developed a new cod fishery attracting 310 vessels that annually harvest almost 25 million pounds from state waters resulting in a total harvest that by 2002 had a value of $33 million.

“But we need to promote more local benefits. Perhaps, taking a look at better ways to market and diversify the industry.”

While fishery rationalization may be a juggernaut for any politician, Knowles and opponents find themselves entangled with another economic resource that also has been bread and butter to the state and that’s the gas pipeline.

“The pipeline contract is high centered. It’s not moving. We don’t know that the deal on the table is the right one,” Knowles said, despite both the House and Senate having passed bills before adjourning a second special session, with another likely to be called after the primaries.

The bill that emerged from the special session sets a new production tax rate of 22.5 percent on oil and offers a 20 percent credit for investment. It ended months of debate for a profits-based oil tax when the Murkowski administration reached an agreement with BP, ConocoPhillips and Exxon Mobil on a proposed gas pipeline contract and oil tax revision.

“An oil tax should play no part in the pipeline’s development. We should not be subsidizing the oil companies to develop a pipeline,” Knowles said.

The pipeline is to stretch from Prudhoe Bay through Canada to the Lower 48, connecting with lines to Chicago.

Total expected income over 30 years from the pipeline ranges from $26.5 billion to $129 billion, depending on fluctuations in the price of gas.

Gov. Frank Murkowski said the legislature’s tax figure was not exactly what he was looking for but was “in the ballpark.”

“It’s time for us to assert our sovereignty and say these are the terms by which we want to see a gas line developed,” Knowles said.

“The pipeline is a lucrative project. We owe it to Alaskans to see which is the best alternatives of people who want to invest and build a pipeline,” he said.

“There are other groups such as Mid-America, TransAlaska and All-Alaska that have proposals out there,” he said. “And we need to make sure a deal is open to others.”

Knowles said written into any contract needs to be assurance Alaskans are hired for jobs to build a pipeline. “Local hire needs to be competitive, and there needs to be an agreement between organized labor and contractors. Hiring halls need to be set up for workers.”

Knowles said the bottom line is not only getting the most revenues for the state from a pipeline but also providing affordable energy to Alaskans.

“We cannot have a contract and watch our gas be shipped to the Lower 48 while we still pay the highest price for fuel at home,” Knowles said.

“We need to make sure rural areas have access to affordable fuel, and find ways to reduce the cost of fuel in the villages,” he said.

“Marketing propane, for example, should be built into the contract,” he said.

Knowles points out that during his administration as governor the North Star and Alpine fields were opened producing 180,000 barrels of oil a day resulting in the first increase in Prudhoe Bay oil production in a decade.

After announcing his candidacy late, Knowles came right out of the chute not so much on the pipeline controversy as he did on education, which seems to be a centerpiece or priority in his campaign.

Knowles said Alaska is facing a crisis in educating its young, and that if elected he is going to seek an overhaul in the foundation formula used to finance the state’s public schools. “Kodiak is not fully funded because of the cost differential unfairly shared with other communities,” he said.

“Education funding, even with recent increases, lags behind needs and rising costs and has failed to match cost-of-living increases.

“Educators, school districts and parents have sued the state, demanding adequate funding with a trial set for October 2,” he said.

Knowles points out that Alaska ranks 45th in high school graduation rates with 40 percent not graduating, and that 40 percent of Alaska schools failed to meet federal No Child Left Behind standards.

He maintains NCLB tells the state how to run its schools but fails the needs of individual students and compromises Alaska’s tradition of local control.

Knowles wants the state to use surplus oil and gas revenues to create a Trust Fund for Educational Excellence to fund programs from early childhood to vocational and technical to university education.

Knowles said a new push on his part is to develop a statewide preschool program starting at age three.

“We need to boost the morale of our teachers reducing class size and providing adequate compensation,” he said.

Alaska ranks 11th in teacher pay, with $40,027 starting pay and an average teacher salary of $51,136.

Another plank in the Knowles vision is providing adequate health care to Alaskans. “There are 120,000 Alaskans who do not have health care,” Knowles said.

One project Knowles has in mind to expand is the Denali Kid Care program, initiated while he was governor, but suffered a 15 percent funding cut under Murkowski. The program covers the gap for kids of working families to be provided health care although parents are above the poverty line but make too much to be covered under Medicaid. “No kid in Alaska should be denied health care,” Knowles said.

His goal is to find a way to provide health care to all working families in Alaska. “We should allow small businesses to buy into the state health program,” Knowles said.

“Health care used to cost about what one would pay for an automobile, now it is the size of the mortgage payment,” Knowles said. “We have to do something about that.”

Knowles also would push for increases in state revenue sharing instead of decreases to help municipalities strengthen infrastructure such as roads and public safety facilities.

“When you cut revenue sharing, then the only alternative is to increase local taxes,” Knowles said.

The bottom line if elected to a third term? Sale the state jet and this warning, Knowles said, quoting from national columnist Thomas Friedman:

“Countries that get addicted to selling their natural resources rarely develop their human resources and educational institutions. … So after the ore has been mined, the trees cut and the oil pumped, their people are even more behind.”

“It’s all tied together (pipeline, education, health etc.),” Knowles said.

Mirror writer Bryan Martin can be reached via e-mail at bmartin@kodiakdailymirror.com.