The Associated Press

INDIANAPOLIS - State officials are preparing a new contract to house hundreds of inmates at a private Kentucky prison even though more than 1,800 new beds are sitting unused in Indiana prisons.

Some Indiana legislators are questioning the out-of-state placements and the contract, saying inmates should be kept in Indiana since space is available at newly built units at the prisons in Miami County and New Castle.

But the state budget lawmakers passed in April discourages it, and the Indiana Department of Correction says its hands are tied.

"It's incomprehensible," Rep. Dennis Avery, D-Evansville, told The Courier-Journal of Louisville . "To open up those prisons so prisoners can stay in the state of Indiana - to me it makes sense. Otherwise it was a waste of tax dollars for construction."

Indiana now houses 650 medium-security prisoners at the Otter Creek Correctional Facility in Wheelwright, Ky., under terms of a contract that expired in January.

The state pays the prison - owned by the Tennessee-based Corrections Corp. of America - $45 a day per inmate, compared with the nearly $50 average cost for Indiana's own prisons.

Indiana correction officials told the State Budget Committee last week they intended to sign a new four-year deal soon for the same per-day rate. That contract calls for as many as 1,000 placements at Otter Creek and other Corrections Corp. facilities.

Avery said it could be cheaper to house the inmates in Indiana. That's because the Otter Creek prisoners are the so-called cream of the inmate crop, the cheapest to serve, he said.

Senate Budget Subcommittee Chairman Robert Meeks, R-LaGrange, said he hoped prison officials would review whether those inmates could be kept in Indiana at a comparable cost.