It's both. School systems are often heavily funded (but not always and not consistently, it varies by literal district). School employees are often drastically underpaid (but not always, and not consistently, it varies by district).

My local school district (generic midwest USA), there's a 17:1 teacher ratio, each student represents $13,011/yr in funding (so a single classroom gets $221,187 in government funding each year). Of that, the teacher in that room collects a salary of $40k to $60k W2 salary each year (plus benefits). Or, a teacher's salary is basically ~20% to 25% of the budget for that classroom, and the rest goes elsewhere.

And yeah, our teachers get literally nothing for their rooms, so they have to beg parents to donate crayons and tissue paper and pencils and basically anything else in their classroom, every year. (generally, each parent is expected to pitch in about $100 per student per year, in donate-ables to cover the stuff the district won't provide for teachers)