With the rapid development of economy and society, the scale of local government debt has also increased rapidly, which has aroused social concern about local debt risk and fiscal sustainability. In order to analyze the influence of local government debt on the fiscal operation of Southwest China, this paper selects the relevant indicators to carry out horizontal comparison, and makes an empirical analysis on the panel data of the fiscal operation of the provinces and cities in Southwest China. The results show that there is a weak sustainability in the fiscal operation of the provinces and cities in the southwest. Although the local debt has not yet had a significant adverse impact on the fiscal operation, the weak fiscal sustainability indicates that there is a certain risk in the fiscal operation of the region, so the government should pay attention to prevention. This paper also puts forward measures to strengthen the control and management of new debt and stock debt, improve the efficiency of fiscal operation and the transparency of fiscal operation, establish a scientific fiscal management system, and improve the financial risk identification and management capacity and other countermeasures to realize the sustainable development of finance.