Is this song about being gay? If you listen to it, it kinda sounds like it. If it isn’t, then what the hell is it about?
I always thought it was about drug dealing. It just conjures up that image to me, although I have to admit i have no idea why.
I don’t know if Paul was being deliberately vague in this interview, but he says Truman Capote interprets it that way, although Simon himself isn’t sure what it’s about. 
FWIW, I’ve heard some people insist “it’s all about weed, man!”
(Previews. Oh. Hi, meyer.)
I thought it was just a couple of kids goofing around and getting into little-kid trouble. But I could see how you could read it any way you wanted.
I really, really love this song. Check out the Dave Matthews Band cover of it - when I saw the DMB at the New Orleans Jazz & Heritage Festival this year Paul Simon came out to play it with them.
Anyway, this web page has one quotation from Simon that seem to imply he did write it about homosexuality and one that seems to imply he didn’t, so I don’t know…
Even though the name of the song is “Me and Julio Down By the Schoolyard” the lyric actually refers to “you, me, and Julio” I think “you” is Rosie, the Queen of Corona (Corona, being a neighborhood in Queens, is that right?). So there are three people up to something in that schoolyard and one of them is a girl (or at least somebody named Rosie).
“It was against the law, oh what the Mama saw, it was against the law” I think the tone of the song implies a sexual “sin” rather than merely illegal like drug dealing- Mama looks down and spits on the ground every time his name is mentioned. When the Papa found out he began to shout.
Could be something homosexual. Could be statutory rape.
I remember reading somewhere it was about a real life news story about a test court case challenging a New York law against oral sex. The radical priest was actually two defrocked Catholic priests who were brothers, the Beringer brothers or the Benniger brothers, something like that, who became involved in advocating for the defendants and later went on to become radical anti-war activists doing stuff like sneaking onto battleships and spilling bags of blood everywhere.
But that could be total BS. I think Paul Simon gets a huge kick out of seeing people project whatever they want onto his evocative but vague lyrics.
But Rosie, daughter of Mama Pajama and the Papa, giving blow jobs to Julio and the song’s narrator in the schoolyard, that’s what I think the song’s about. But maybe Rosie is a guy? The “Queen” of Corona after all.
The song is “about” whatever you want it to mean.
Not everything has a literal interpretation. Sometimes the fun is hinting at things without them necessarily meaning anything at all.
I saw an interview he did on TV, and when he was asked what the mama saw, he said, “I don’t know. Something sexual I suppose.”
I always thought me and Julio were doing something naughty with Rosie. And I assumed the mama was Rosie’s mama. I don’t know why.
The name you seek is Berrigan.
I take no stand on whether the song was inspired by a real-life case.
Dunno what it’s really about, but the song got some air time in Boston in the 80’s, right after Red Sox player Julio Valdez got busted for statutory rape.