NEW YORK — New York City will see a sharp drop in personal income tax collections this year, surprising city officials who now warn of a possible end to the nearly decadelong boom that accompanied Wall Street’s gains.

Mayor Bill de Blasio said Thursday the city projects that it will receive $935 million less in income tax revenue than the previous year — echoing an even larger shortfall in New York state’s budget.

State and city officials suggest several reasons for the decline, but most seem linked to Wall Street, with the stock market’s volatility at the end of 2018 having a ripple effect on municipal budgets, as well as to changes related to the 2017 Republican federal tax overhaul. That includes a short-term boom in tax revenue at the end of 2017 as some residents rushed to pay state, local and property taxes before the new federal law.

New York has long tied its fortunes to Wall Street; the securities industry accounts for a disproportionate share of the city’s wages, and taxes paid by the highest-earning 1 percent of New York taxpayers typically generate more than 40 percent of personal income tax receipts in the state.

In recent years, that relationship has helped the state and city steadily increase their budgets; New York City, for example, has boosted its full-time workforce to its highest level in history.

But the stock market’s decline at the end of last year, when some indexes posted their worst monthly performances since the Great Depression, led to several factors that may have driven income tax revenues lower.

The recent market drop, by coming late in the year, was particularly well-timed for investors looking to take advantage of investment losses to offset gains elsewhere in their portfolios. By taking those losses, investors would trim their overall tax burden, reducing tax revenue sent to the state and city.

“New York has a lot of high earners and high net worth individuals who may have, at the end of the year, chosen to take capital losses,” said Jared Walczak, a senior policy analyst at the Tax Foundation, a right-leaning think tank. “That’s going to be a much bigger hit to New York than to a typical state.”

Other states that depend heavily on high-income taxpayers for their revenues, such as California and Connecticut, also saw big drops in revenue late in 2018, according to Lucy Dadayan of the Tax Policy Center, a joint project of the Urban Institute and the Brookings Institution.

The gaps also have prompted a deeper, and perhaps more troubling, question: Is this the new normal?

“If this is actually a change in taxpayer behavior, long term, and not a blip or an overcorrection,” said David J. Friedfel, director of state studies for the Citizens Budget Commission, “then this is the new base.”

A confluence of forces made for an especially choppy and unpredictable budget in the past couple of years.

In making their predictions of shortfalls, city and state budget offices look at money from estimated tax payments that arrive during December and January, often from high earners with large investment portfolios. That two-month period is considered an “important bellwether,” according to a recent report from Moody’s Investors Service.

Many taxpayers with significant investment profits, so-called capital gains, make big payments at the end of the year. But the bad stock market at the end of 2018 meant capital losses and fewer tax payments.

It was the reverse in late 2017 and early 2018. Payments were inflated as taxpayers navigated the new tax code. The pending changes created incentives for taxpayers to shift income and tax payments, either by waiting until the new rules took effect or to take advantage of the old system before it went away. The change in the law also spurred companies to pay out bonuses to workers, giving a temporary boost to tax revenues that will not be repeated this year.

Gov. Andrew Cuomo, a third-term Democrat, saw a different culprit for much of the state’s projected $2.3 billion shortfall, what he called “a diabolical, political maneuver” in the new tax rules to cap the so-called SALT deduction — something he said might be causing high earners to flee to tax havens like Florida.

“For richer people, your tax liability could have gone up now $100-, $200-, $300,000,” Cuomo said Tuesday. “And there is a tipping point where people say, ‘I love New York, but to spend another $300,000 in taxes? I’ll move.’ ”

Many experts, however, were skeptical that the change in the SALT deduction, which placed a $10,000 cap on state and local tax deductions, was having as big an effect as Cuomo suggested.

Michael Leachman, senior director of state fiscal research at the Center on Budget and Policy Priorities, a liberal think tank, noted that studies have generally found little evidence that millionaires decide where to live based on tax policy. And even experts who were more sympathetic to Cuomo’s argument doubted that there had been an exodus large enough to have a significant effect on state revenues in the short term.

“I don’t think anyone else believes it’s responsible for a $2.3 billion shortfall,” said Jared Walczak, a senior policy analyst at the Tax Foundation, a right-leaning think tank. “That sort of mass out-migration would have been much more evident than it has been.”

The specter of a shortfall is likely to hang over coming negotiations over the state budget, due April 1, and any discussion of increasing funding for things like education, the state’s No. 1 cost. The state Assembly, in particular, is adamant that schools need billions of dollars more than Cuomo proposed in his budget Jan. 15; a shortfall would be a powerful argument against that.

The governor’s assertion of a $2.3 billion gap — as tax withholdings and estimated payments to the state fell in December and January — also comes with considerable caveats, including the fact that some economists believe that number could shrink as the April 15 tax deadline approaches and more people file their returns.

Some budget officials in California, for example, and elsewhere say they believe that the new SALT deductions changed taxpayer behavior by removing the advantage to paying such taxes in December to use them as federal tax deductions. The officials remain optimistic that the revenue losses in December and January may dissipate as April tax deadlines approach.

“Most if not all of this decline in December-January revenue is expected to be recouped in April,” according to H.D. Palmer, a spokesman for the California Department of Finance, when personal income tax returns are due.

Legislative budget analysts in Albany, New York, also believe the final shortfall may shrink to less than $1 billion as people start to pay, and other New York officials have acknowledged that the state might see its financial situation improve as the year progresses, as taxpayers adapt to the new rules.

“We know that April is also a time of great deal of activity around the April 15 date,” said state Comptroller Thomas DiNapoli, a Democrat, who appeared alongside Cuomo in Albany on Monday. “So, it’s not all gloom and doom, but it is a message, of very, very serious concern.”

In New York City, the 7 percent drop in personal income tax revenues was revealed as de Blasio released a preliminary $92.2 billion budget for next year. He called for $750 million in budget savings that could include cuts in some programs, although his overall proposed budget for next year still calls for a $3 billion increase in overall spending.

These agency cuts are known as PEGs, programs to eliminate the gap, and budget watchdogs have long been after de Blasio to require them from agencies, but he has resisted until now. Each agency will be told to trim a certain percentage from its budget.

The mayor said that the largest components of this year’s anticipated budget increase were the estimated $1 billion in higher labor costs and more than $600 million in new education spending for things like increased special education programs, 3K and charter school costs.

De Blasio cautioned that the long economic expansion may be coming to an end, citing a possible trade war and the risk of another federal government shutdown. “We have some tough choices up ahead by any scenario,” the mayor said.

This article originally appeared in The New York Times.