As the CEO of one of California's largest and oldest companies, I'm a believer in this state. I'm also a fourth-generation resident of California, so I have seen our state at its very best – as a magnet to attract and retain investors. For anyone in search of opportunity, a good job and a great way of life, this was the place to be.

Yet for the first time, more people and businesses are now leaving California than moving here. Eighty-four percent of business owners say they wouldn't locate in California if they weren't here already. Californians pay some of the highest tax rates in America, yet somehow the state remains in a chronic fiscal crisis. In order to return California to prosperity, we need to seriously address some very difficult issues.

When a state is in the shape we're in, we can't blame it all on the global economic situation. A significant part of the problem is the result of decisions we've made right here in California over the years. Whether it is the state's debt levels, the budget deficit or unfunded public pension obligations, the numbers tell the story. Nothing is less partisan than arithmetic. Setting the state's books in order requires tough questions, and to their credit, Gov. Jerry Brown and the Legislature are willing to ask them. In fact, they have approved some significant budget cuts already.

Unfortunately, we still hear calls for higher taxes – even though California's total tax rate is among the highest in the country. Insisting on more revenue only evades a destructive spending problem that is all too apparent. Extending temporary tax increases may be necessary to bridge a short-term gap, but they’re only temporary, stop-gap measures – not a permanent solution.

To control spending will require more than annual improvising to fill budget gaps. We need structural reforms to address the substantive challenges we face, including the state's long-term public pension obligations. A Stanford study estimates unfunded pension liabilities alone at more than $425 billion. Pension reform must be carried out fairly and responsibly, respecting the people who have devoted their lives to public service. But the greatest responsibility is to long-term solvency and economic security for all Californians.

The debate over budget reforms would be far less rancorous if we shifted our focus from shared sacrifice to a focus on shared work, output and prosperity. Instead of old arguments over how much more government can take away, we should be asking how much more our people and businesses can create.

From 2004 to 2009, for instance, Chevron made more than $7 billion in capital investments in our California businesses, primarily in oil and natural gas production in the San Joaquin Valley and our two manufacturing centers in Richmond and El Segundo. Major capital commitments like these help sustain our employment base in California. That in turn generates tax revenues, supports small businesses, and enables us to contribute to education and other priorities.

We would invest more if we could. But it is difficult to make the economic case when construction permits take years to approve and are then thrown into the courts, where they are delayed even longer. We are experiencing this gridlock directly at our Richmond refinery, costing the community millions of dollars in economic support and more than a thousand jobs. Companies large and small across California could tell similar stories.

California needs to get serious about adopting rational reforms to a regulatory apparatus that is smothering business and destroying jobs. The seemingly endless restrictions are not just increasing the cost of doing business but also adding to the uncertainties. Many businesses feel they can't control their own destiny in California, so they look elsewhere.

I am an optimist about California and its future. No state has more natural advantages to offer entrepreneurs. To draw them back, we just need to apply basic, common-sense business principles to how we manage this state, and then let the free enterprise system do what only it can do – innovate, create jobs and get California growing again. And with that revival of the private sector, California will again be the magnet for growth and opportunity that it has been for the last 150 years. It is entirely up to us.

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