" increase in tax liability is not same as amount taxable  on state tax recover worksheet by proseries in current year"

It won't be. If the recalculated tax is higher, that means there was a tax benefit was received by deducting the samount of state tax that was refunded. ergo, the refund is taxable.

A deduction does not give rise to an equal ampount of tax savins. A refund of a deducted amount does not increase tax by the amount of the refund. Marginal tax brackets at work.