Why not try something like this:
<?php
//Current date
$date_book = date("Y-m-d");
// Returns a date in YYYY-MM-DD format however, any format as long as its year, month, day should work thanks to the flexibility of mktime()
$date_return = "2007-01-01";
// Breaks the date apart into it's year, month, and day components
$date = explode('-', $date_return);
// mktime takes the exploded pieces and subtracts 1 from the day and then redisplays accordingly
$date_flag = date("m-d-Y", mktime(0,0,0, $date[1], $date[2]-1, $date[0]));
echo $date_flag;
?>