This article reports how New York Gov. Eliot Spitzer is dangling billions of dollars in extra aid and the promise of universal prekindergarten in front of his state's public schools--along with the prospect of mandated performance contracts for districts, and the threat that local boards and superintendents could be ousted and hundreds of schools closed if they fail to improve. In a state where public education is overseen by a board of regents and education commissioner independent of the governor, Gov. Spitzer made clear that he will take an active role in education policy. He outlined a multiyear agenda and tapped Manuel J. Rivera, the superintendent of the 34,000-student Rochester, N.Y., district, to be his chief education adviser. The newly inaugurated Democrat joins a sizable class of governors who are proposing significant education initiatives because they believe their future economies depend on it.