FAIRBANKS -- For 35 years, former state Sen. Rick Halford said, Alaskans haven't worried much about how to pay for state government.

But that has to change, he told more than 200 Alaskans who gathered at the University of Alaska Fairbanks Friday night at the opening of a three-day event to discuss how Alaska can deal with a new era of reduced revenue brought on by long-term oil production declines and a more drastic drop in oil prices since last fall.

"We've spent the last 35 years often ordering at wonderful restaurants with no prices on the menu," said Halford, who co-chaired the transition team for Gov. Bill Walker and Lt. Gov. Byron Mallott with Ana Hoffman. "Today, we're not just asking people what do they want, but we have to ask, 'What are you willing to pay for?'"

"That's obviously where we're going," he said.

Halford and others who spoke at the opening dinner advised the members of the Walker-Mallott transition team and dozens of other participants from across the state to use the weekend to begin the process of adapting to the new reality of reduced revenue. Mallott set the stage by saying Alaska may go one of two directions in the future.

"We will either be a state in which we believe that we can be a society divided and still somehow make progress," he said, or we can be a society in which people know they can disagree but "come together to make the decisions that build a better Alaska for every single one of us."

Walker, meanwhile, said that many people regard the challenge facing Alaska as a statistical one that can be reduced to charts and graphs.

"Some people see numbers and dollar signs, I see faces. I see faces of children, of grandchildren," Walker said.

He said he and Mallott have been scrambling since the election last fall with the drop in oil prices, and that the discussion needs to expand and consider the many options facing the state.

Earlier Friday, Walker took part in an event in North Pole at which he heated up and fused together two pieces of plastic pipe as a ceremonial start for the Fairbanks natural gas utility. He brought the black, high-density pipe to UAF and held it up for the crowd.

"We want to bring Alaska together," he said. "The deal is, we do need to come together. We do need to talk to each other. We need to stop talking past each other, we need to talk amongst ourselves about what the solutions are."

Alaskans from all over

The participants converged at UAF from around the state, from Kotzebue on the northwest coast to Ketchikan in Southeast.

About 200 people were present by the time the conference began Friday evening. The majority were members of Walker's transition team; a few dozen more Alaskans were invited by the Walker administration. A handful of legislators were present as observers, including Reps. Dan Ortiz, I-Ketchikan, Adam Wool, D-Fairbanks, Harriet Drummond, D-Anchorage, Neil Foster, D-Nome, and Sen. John Coghill, R-North Pole.

One plane from Anchorage on Friday afternoon contained a handful of Walker's department heads, the president of the state's largest labor group, members of industry groups and the mayor of the Northwest Arctic Borough.

The commissioner of the state's Department of Administration, Sheldon Fisher, carpooled from the airport with Marc Luiken, the state transportation commissioner, who drove. All told, 14 state commissioners were in attendance Friday night.

The evening program was also televised on public TV and broadcast online.

Those attending the conference appeared to be predominantly middle-aged and older, with a sprinkling of younger people.

There were Republicans and Democrats, though a spokeswoman for the state Republican Party, attending as an observer, questioned whether the Walker administration had convened a truly representative sample.

The spokeswoman, Suzanne Downing, sat at the back of the room with several local Republicans, and said the roster of participants appeared to skew toward those who were Democratic or undeclared voters.

"We're going to be here all weekend," Downing said. "We want to succeed in coming up with the right balance. But that balance cannot upset the confidence the markets have in us."

Participants, mingling in the lobby before the start of the conference's evening program, said they were eager to start the weekend's discussions but also pragmatic about the task at hand.

"This is not a two- to four-year problem," said Mila Cosgrove, 53, who was one of Walker's transition team members and works in human resources for Juneau's city government.

The state's fiscal crisis, she added, will take "creativity and diligence" to fix.

"I'm hopeful that people will listen deeply," she said.

The discussions Saturday and Sunday essentially challenge participants to rebuild Alaska's government from scratch. First, they'll be asked to examine the services the state currently offers and figure out which ones they think should be preserved.

Then, they'll look at at methods the state can use to bring in the money needed to support the level of government that people want.

Seven economists from the state's tax division are attending the conference to support seven different discussion groups, said the division's director, Ken Alper. There's also a new fiscal model created by the Department of Revenue that will be used over the weekend and simultaneously released to the public online.

The Walker administration then plans to hold similar discussions around the state throughout the rest of the summer.

Unusual accommodations

In spite of the serious work ahead and the state's dire fiscal outlook, the atmosphere Friday evening was convivial, something akin to a college reunion. It seemed appropriate, then, that many of the conference participants were staying in university dormitories.

Walker said when he turned in for the night Thursday that it was the earliest he had ever gone to sleep in a college dorm room.

Alper, the tax director, said he has a double room in 60-year-old Wickersham Hall on the university campus.

"I walked in and there was a guy sitting on the bed -- it was just like college," Alper said. He was told to bring shower shoes for the walk to the communal bathroom, he added.

Alper's roommate is Doug Ward, a member of Walker's transition team who works at Vigor Alaska, the Ketchikan shipyard that's building two new ships for the state's ferry system.

Ward, 67, said Wickersham Hall is "like my dorm room was 50 years ago."

Ward is on the state's workforce investment board and said he wants to see plans emerge from the Fairbanks conference to make sure Alaska students are well-trained for careers in industries like his.

Ward said he was optimistic about the state's future, huge deficits notwithstanding, noting that he lived through another Alaska economic crisis in the 1980s.

Pulling an iPhone out of his pocket, he brought up a photo of a young Ketchikan woman who graduated from high school this week and has already started training to be a welder at Vigor.

"Disturbing as the fiscal situation is, I'm confident we're going to be able to respond in a way we're going to have a better state when we get out of this," Ward said. "I came to Alaska in 1985 on the Slope and saw it crash then -- and I'm still here."

Watch the "Building a Sustainable Future" conference from Fairbanks on 360 North.

Opening presentation explaining Alaska's current fiscal predicament by Gunnar Knapp from the University of Alaska Anchorage's Institute of Social and Economic Research: