You are incorrect.

The budget was set based on the expected taxable income. When covid hit, that number (last years budget) was lowered as a response to expected lost income. That lost income never materialized, and so the state went over the budget revenue because the budget was smaller than expected.

The refund you are getting is only in response to last year's budget, which was less than the amount of tax taken in. Next year's budget will be raised because there is no expected drop in productivity.