Drought is a prominent climatic hazard in the south-central United States. Drought severity is frequently classified using the categories established by the U.S. Drought Monitor (USDM). This study evaluates whether the thresholds for the standardized precipitation index (SPI) used by the USDM accurately classify drought severity. This study uses the SPI based on PRISM precipitation data from 1900 to 2015 to evaluate drought severity in Texas, Oklahoma, and Kansas. The results show that the fixed SPI thresholds for the USDM drought categories may lead to a systematic underestimation of drought severity in arid regions. To address this issue, objective drought thresholds were developed at each location by fitting a cumulative distribution function at each location to ensure that the observed frequency of drought in each severity category (D0–D4) matched the theoretical expectations of the USDM. This approach reduces the systematic biases in drought severity across the western portion of the study region. Therefore, we recommend developing objective drought thresholds for each location and SPI time scale (e.g., 1, 3, and 6 months). This method can be used to develop objective drought thresholds for any drought index and climate region of interest.