Despite California's $19 billion budget deficit, Gov. Arnold Schwarzenegger's administration said Wednesday it will borrow nearly $65 million from the state's cash-strapped general fund to begin building a new 1,152-bed death row at San Quentin State Prison.

Borrowing now will save money in the long run by reducing interest payments and taking advantage of the favorable construction climate, said Department of Finance spokesman H. D. Palmer.

Legislators and social services organizations have stalled the bonds that would usually pay for construction by suing Schwarzenegger over several of his budget vetoes last year. Palmer said the administration is confident the governor's veto authority will be upheld by the California Supreme Court, which is scheduled to hear arguments Sept. 8.

Legal debate aside, opponents of the death row expansion said it is foolish to take money from the general fund, which pays for ongoing state operations, when the state hasn't decided how to deal with its budget deficit.

Assemblyman Jared Huffman, D-San Rafael, called it "stunningly hypocritical" that the governor is borrowing from the general fund at the same time he is attempting to furlough state employees three days each month to avoid a looming cash crisis. The state could soon again begin issuing IOUs because it is out of money, Huffman said in a statement.

He and Sen. Mark Leno, D-San Francisco, also criticized the projected cost overruns for a project that originally was expected to cost $220 million.

The administration put the total price tag at $356 million for 768 new cells, a 24-bed medical treatment center and other support buildings. The new cells will contain 1,152 beds, because many of the inmates will be housed two to a cell.

The $64.7 million borrowed from the general fund will go to pay first-year costs, Palmer said. The money could be repaid from bonds issued as early as next spring, after Schwarzenegger has left office, assuming the state's high court rules in the administration's favor this fall.

"We're extremely confident that we're going to prevail," he said. Palmer noted the project was originally approved by lawmakers in 2003 but has been stalled ever since.

Bids are going out Thursday, with construction set to start in November. The entire complex is scheduled to be finished in February 2013.