The total $400 million expansion project includes 768 cells, enough for more than 1,100 beds.
The new complex will also have a hospital and six guard stations.
Assemblyman Jared Huffman (D-San Rafael), whose district includes San Quentin, is upset Schwarzenegger is moving ahead with the prison's expansion, borrowing $65 million from the general fund for the first phase.
The move comes at a time when the state is facing a $19 billion deficit and even deeper budget cuts are inevitable, plus the 6-week-old budget stalemate puts California closer to issuing IOUs to pay its bills.
"In the best of times, this is a lousy project," Huffman said. "That's $65 million to IOUs, to deferrals of payments, to schools, to childcare centers, to health clinics, to critical needs that surely ought to rank well ahead of this boondoggle prison project that we don't need and can't afford."
But the governor's office said the Legislature itself passed a law several years ago requiring death row to be upgraded and that now is the time to start the project because it will cost taxpayers up to 55 percent less and provide about 6,000 jobs.
"Right now, we have an incredibly favorable bid climate in California," said H.D. Palmer of the California Department of Finance. "Construction firms are very eager to do business, particularly with the state."
Borrowing from the general fund is the only way to ramp up the San Quentin project because a pending budget lawsuit between the governor and Legislature has made it impossible for the state to get a construction bond from Wall Street.
The administration points out the budget for other state programs won't be affected and the $65 million will eventually be paid back once the state can sell construction bonds.
But people at Resources for Independent Living said they don't believe that the money will be paid back and wonder why prisoners seem to matter more than services for the disabled, which are on the chopping block.
"In lean times, you have to prioritize and I would think holding harmless innocent poor people of California would be a number one priority," said Frances Gracechild of the organization.
The project is expected to be done in three years. Huffman said this would be the most expensive prison housing built at $500,000 per cell.