It’s only been a few years, but it seems as if the Knicks have been in salary cap hell since some time during the 1970s. This summer they won’t get under the cap, but they’ll get close enough that it’s time to start examining long-term fiscal strategies for the ballclub.

At present, the Knicks financial mismanagement has been an oftrepeated joke. With a payroll of $139 million, they are not only over the cap, but they’ve doubled it. The next closest team is the free-spending Dallas Mavericks, yet their payroll is nearly $50 million lower than the Knicks outlay.

And Dallas fans are reaping the benefits of the spending; their Mavericks made the Finals last season and have the best record in the league this year while the Knicks’ win total for the last two seasons doesn’t approach the Mavericks’ either this year or last.

The Knicks payroll is about to lose more than $60 million in excess baggage this summer. That’s when the contracts of Allan Houston, Jerome Williams, Shandon Anderson (!), Maurice Taylor, and Jalen Rose come off of the books. While only Houston at his peak was an All-Star, those five players combined to make — I can’t say “earn” — more than $60 million this season, and not one of them played even a minute for the Knicks (and it’s not as if they would have helped much if they had).

In short, the Knicks have written the book on fiscal mismanagement in North American team sports. But they are nearing the end of that era. What happens now?

As of July 1, the Knicks payroll will stand at just more than $87 million for the coming season (some of the $60 million saved from the bad contracts will go into annual raises for players with long-term pacts). But with the nearly $40 million due to aging guards Stephon Marbury and Steve Francis due to come off the books in 2009, it’s time for the Knicks to set a new financial agenda.

The first signs that the team’s brass wasn’t satisfied with the status quo came during training camp when it bought out the final year of the contracts belonging to Rose and Taylor. This tied Isiah Thomas’s hands, preventing him from dealing them for a player with a longer contract (as it happened last winter when Anfernee Hardaway’s soon to expire deal was sent to Orlando for Francis’s long-term deal).

If this trend continues, then Thomas will have to make a strong case to use the team’s midlevel exception, typically a contract of just under $6 million a season for five years. In the past two seasons, Thomas’s mid-level signings, center Jerome James and swingman Jared Jeffries, have been huge disappointments. It’s become increasingly clear that Thomas’s personnel strength is in judging young talent. When it comes to acquiring veterans, he’s one of the worst GMs in the game.

Thus, a sensible strategy would be for the Knicks to continue building around their young core of players and having some salary cap room in two seasons to go hunting for bigger game. However, the next two years aren’t just a waiting game. The Knicks must be prudent in managing the contract extensions of their young players. Last summer shorter contracts came into vogue, particularly for high-risk, high-reward players like Chris Wilcox and Drew Gooden. The Knicks will need to follow that precedent in negotiating their extensions during the summer of ’08 with David Lee, Channing Frye, and Nate Robinson.

Cap room alone isn’t going to help a team build a winner. Just ask a Bulls or Hawks fan. Post-Jordan Chicago had oodles of cap room but no one wanted to play for them, and they wound up spending it on the likes of Rose, Ron Mercer, and Eddie Robinson. Atlanta got a good player in Joe Johnson, but his services cost them far more than his market value due to the Hawks barren roster.

To build something more than a team that annually exits the playoffs in the early rounds, the Knicks will need to assemble a roster full of manageable contracts. In the last two seasons, the Knicks roster has had six contracts that topped the $15 million a year mark. As it might be obvious to even the Knick front office, it’s hard to move those contracts and get value. By building a team full of players on shorter-term $7 million to $10 million deals, the Knicks will have the flexibility to make moves for big-name players should they become available.

If that model sounds familiar, it should. It was built by Joe Dumars in Detroit earlier this decade. Dumars was Isiah’s backcourt mate on the early 1990s Pistons title teams, and oddly their skills as team executives are complementary. Dumars isn’t much of a drafter (Darko anyone?) nor does his organization develop talent well, but he’s an ace at finding undervalued veteran talent and signing it to manageable contracts. Dumars had built a good team, then when forward Rasheed Wallace became available, he moved fast to get him. That move turned a good team into a champion. Isiah has built a young nucleus, and as they age out of their rookie contracts, he will have to follow the example of his former teammate.

Thomas built these Knicks in the mode of his Pistons — scoring guards leading the offense with role players on the frontline. It hasn’t worked out as well as he thought it would, but with solid future planning, the Knicks can put themselves in position to be flexible enough to improve dramatically when the opportunity arises.

mjohnson@nysun.com