This paper examines how increased drought frequency impacts water management in arid region, namely the Edwards Aquifer (EA) region of Texas. Specifically, we examine effects on the municipal, industrial, and agricultural water use; land allocation; endangered species supporting springflows and welfare. We find that increases in drought frequency causes agriculture to reduce irrigation moving land into grassland for livestock with a net income loss. This also increases water transfer from irrigation uses to municipal and industrial uses. Additionally, we find that regional springflows and well elevation will decline under more frequent drought condition, which implicates the importance of pumping limits and/or minimum springflow limits. Such developments have ecological implications and the springflows support endangered species and a switch from irrigated land use to grasslands would affect the regional ecological mix.