Victors say the governor’s special-election defeat signals his doom.

Election night was young. Any results you could hang your hat on were least a couple of hours away. But John Ferrington, a teacher at Gavilan View Middle School, was already in full-tilt party mode.

“Arnold, the people have spoken to you,” said Ferrington, a large man wearing sunglasses, a purple beanie and extra-large, psychedelic tie-dyed T-shirt. “Not only have you awoken the sleeping giant, but you’ve lost.”

Gavilan, who emphatically delivered his line to a local television news crew in his best Austrian accent, pretty much summed up the mood at the gathering of mostly teachers, union members and Monterey County Democrats at Ellie’s Restaurant in Salinas.

All four propositions that Gov. Arnold Schwarzenegger bet his political capital on—Propositions 74, 75, 76 and 77—failed at the polls in California’s most expensive election in history Nov. 8.

While Schwarzenegger billed the propositions as a way to reform the state’s political system, union members understood Props 74 and 75, specifically, as a direct assault on their power.

Prop 74 would have made it harder for state teachers to gain tenure, while Prop 75 would have made it harder for public unions to raise political funds from members. Both failed by slim margins.

On Tuesday, many union activists were almost gleeful at how Schwarzenegger banded them in oppositions to those two propositions.

“I still can’t understand why Schwarzenegger did it,” said Dale Morejon, member of the California Teacher’s Association, a 330,000-member union that outspent everyone else this election with $55 million. “But thank goodness he did. He’s the best organizer we’ve ever had.”

Ann Jimenez agreed. The teacher at San Lorenzo Middle School in King City said this election was about the very survival of unions in California.

“On any given night in the last few months, you’d have a roomful of volunteers phone banking side by side—teachers, police officers, nurses, firefighters,” Jimenez said. “We were all working for a common goal, which is something that doesn’t happen often.”

Vikki Ponce, local chapter leader for the California School Employees Association, said Schwarzenegger’s efforts even united school boards and employees, who until this campaign had been mired in bitter differences over the prospect of outside contracting.

“As soon as he came out with propositions, we said, ‘Wait, let’s join forces,’” Ponce said.

This newfound union of unions will give Schwarzenegger a hard fight when he runs for reelection next year, many activists promised.

“To put it simply, he’s doomed,” says Rosa Escamia, a San Jose-based member of a school employee’s union.

Even though she ended up on the winning side, Alicia Garcia-Gozbekian was only partially comforted by victory. That’s because the special education teacher at Harden Middle School believes that the whole special election was a waste of money.

“Since 1981, I’ve been a precinct volunteer for every election,” Garcia-Gozbekian says. “I don’t think it was right for him to attack public service workers.”

Spencer Critchley, spokesman for the Monterey County Democratic Committee, said the governor’s defeat—coupled with Democratic governors winning in New Jersey and Virginia—is great news for the resurgence of the Democratic Party.

But he admitted that the $250 million spent in this election doesn’t bode well for democracy. “It’s become sort of an arms race,” Critchley said.

Sitting back in a leather lounge chair staring at election results on television, Ferrington high-fived nearby companions as it became clearer the governor’s propositions had failed.

“As Winston Churchill said, ‘This isn’t the beginning of the end, but the end of the beginning,” Ferrington said smirking. “At least for Arnold.”